Small lift in Christmas retail sales seen as ‘disappointing’

A 0.6 per cent rise in retail sales in December - traditionally the busiest month of the year - has been described as disappointing.

The latest figures from the Central Statistics Office (CSO) indicated the volume of retail sales rose by 3 per cent on an annual basis in December.

When volatile car sales are stripped out, retail sales rose by 1.3 per cent in December compared with the previous month, and grew by 3 per cent on an annual basis.

The sectors with the largest monthly increases were books, newspapers and stationery which enjoyed a 4.2 per cent bounce in sales, and pharmaceuticals, medical and cosmetic goods which saw sales rise by 3.8 per cent.

The sectors with the largest monthly decreases were clothing, footwear and textiles, which saw sales drop 1.1 per cent, and fuel which saw a 0.1 per cent drop in trade.

Mark Fielding, chief executive of the Irish Small and Medium Enterprises Association, described the figures as “disappointing”, adding that high costs were continuing to “crucify” small retailers.

He said: “Once more we have seen the consumer exert extreme caution in their spending over the Christmas period, driven by continued economic uncertainty.”

“While the 58,000 new jobs created should be expected to generate new spending, the fact of the matter is that the new wages are being used to pay down pre-existing debt, pay property tax and save for new taxes”.

“The 25 per cent reduction in sales volume in the last six years without a corresponding reduction in costs means that many SME retailers are flatlining, with the anticipated upturn coming too late for some.”

Investec’s Emmet Gaffney said: “Anecdotal evidence regarding Christmas trading had been mixed (despite the discernible improvement in domestic indicators over recent months) so expectations were somewhat tempered prior to today’s release.”

“However, it appears that for the second year running, the anecdotal evidence has been wide of the mark (in 2012, retailers claimed that Christmas trading was the strongest in several years, only for subsequent data to show a 1.2 per cent contraction in retail sales).”